Does a nonlinear specification methodology better capture the link between host country corruption levels and inward foreign direct investments A study of 92 countries

2020 ◽  
Vol 23 (1) ◽  
pp. 50
Author(s):  
Chi Hui Wang ◽  
Prasad Padmanabhan ◽  
Chia Hsing Huang
Keyword(s):  
Host Country ◽  
Foreign Direct Investments ◽  
Specification Methodology

Market distance and insider-ownership strategies: a resource-dependence perspective

2019 ◽  
Vol 57 (11) ◽  
pp. 2958-2977
Author(s):  
Wen-Ting Lin
Keyword(s):  
Corporate Governance ◽  
Host Country ◽  
Resource Dependence ◽  
International Market ◽  
Resource Dependence Theory ◽  
Business Group ◽  
Foreign Direct Investments ◽  
Content Type ◽  
Market Distance ◽  
Managerial Level

Purpose Ownership issues are an important feature of corporate governance when firms focus on global expansion in multiple and diverse regions. Drawing on resource dependence theory (RDT), the purpose of this paper is to address the phenomenon regarding the extent to which international market distance affects equity stakes in group-affiliated firms held by business group headquarters. Design/methodology/approach This study uses longitudinal data on foreign direct investments by 106 business groups (BGs), including 561 group-affiliated firms, from Taiwan over a five-year period from 2006 to 2010. Findings The results show that the equity stakes of the BG headquarters in the group-affiliated firms in foreign markets were positively associated with the geographic distance between the country of the BG headquarters and the host country of the foreign group-affiliated firms, the cultural distance between the country of the BG headquarters and the host country of the foreign group-affiliated firms and institutional distance between the country of the BG headquarters and the host country of the foreign group-affiliated firms. Research limitations/implications Most studies of corporate governance and international business are based on a transaction cost economics approach, a resource-based perspective and agency and institutional theories. In contrast, this study, by using RDT, provides an alternative explanation regarding the factors that affect the equity stakes of parent firms in group-affiliated firms. Practical implications This study presents two basic pieces of advice for consideration. First, at the managerial level, group-affiliated firms should develop their own resources and capabilities in order to become more autonomous in pursuing advantageous international activities that the parent firms may not foresee. Second, and again at the managerial level, business group headquarters should adopt a strategy to balance the dependency relationship between group-affiliated firms and business group headquarters. Originality/value This study provides the most finely grained analysis, to date, regarding how international market distance affects business group headquarters from newly industrialized economies in terms of diverse equity stakes in foreign affiliates, the unique attributes of BGs and international market distances’ relationship with both the operations and the expansion opportunities of BGs.

International Investments and the European Challenge

1992 ◽  
Vol 24 (1) ◽  
pp. 83-94 ◽  
Author(s):  
M de Smidt
Keyword(s):  
Host Country ◽  
Foreign Direct Investments ◽  
Labor Costs ◽  
International Investments ◽  
The United Kingdom ◽  
The Pacific ◽  
The Usa ◽  
East German ◽  
The 1960S ◽  
Financial Transactions

The complicated pattern of foreign direct investments (FDI) is analyzed for the Single European Market. There are huge FDI flows from the USA and Japan. The Japanese are newcomers: they already made financial transactions through Luxembourg and are building up their logistic operations in the Netherlands. A new division of labor is presented, which includes the United Kingdom as a prime host country for reasons of language and low labor costs. Ireland, Catalonia, and some East German Lander may be the exception to the rule that investments are made in the core regions. A shift was seen in FDI during the 1960s to the Pacific Rim, the USA being a prime host country for FDI during the 1970s.

scholarly journals DETERMINANTS OF FOREIGN DIRECT INVESTMENTS OUTFLOW FROM A DEVELOPING COUNTRY: THE CASE OF TURKEY

2013 ◽  
Vol 11 (2) ◽  
pp. 241-255 ◽  
Author(s):  
Gokhan Onder ◽  
Zeynep Karal
Keyword(s):  
Host Country ◽  
Inflation Rate ◽  
Home Country ◽  
Developed Countries ◽  
The Other ◽  
Foreign Direct Investments ◽  
Tax Rate ◽  
Factors Affecting ◽  
Negative Relation ◽  
Positive Effects

Foreign direct investments (FDI) outflows of Turkey have remarkably been raising over the last decade. This rapid increase brings about the need for questioning the determinants of FDI outflows. The aim of this paper is to estimate the factors affecting outflow FDI from Turkey from 2002 to 2011 by using Prais-Winsten regression analysis. According to estimation results, population, infrastructure, percapita gross domestic product of the host country, and home country exports to the host country are the factors having positive effects on outflow FDI. We found, on the other hand, that the annual inflation rate of the host country, its tax rate collected from commercial profit, and its distance from Turkey have a negative relation with investment outflows. Moreover our results show that while investment outflows to developed countries are in the form of horizontal investments, investment outflows to developing countries are in the form of vertical investments.

Foreign direct investment, smart policies and economic growth

2017 ◽  
Vol 17 (3) ◽  
pp. 245-256 ◽  
Author(s):  
Murat Yulek ◽  
Nurullah Gur
Keyword(s):  
Host Country ◽  
Capital Accumulation ◽  
Developing Economies ◽  
Foreign Direct Investments ◽  
Domestic Investment ◽  
Host Countries ◽  
Fdi Inflows ◽  
Investment Policies ◽  
Net Benefits ◽  
Fdi Policies

Developing economies need foreign direct investments to complement domestic investment with a view to increase capital accumulation, productivity and growth rates. But, foreign direct investments (FDIs) may have costs in addition to the well-known benefits to the host country. Generating higher net benefits from FDI necessitates design and implementation of ‘smart’ investment policies by the host countries rather than the current orthodoxy of ‘neutral’ FDI policies, which is based on liberalizing the FDI inflows and aim to attract ‘any’ kind of FDI. In this article, we discuss such polices and how they relate to host country circumstances.

Institutional distances, resources and entry strategies

2017 ◽  
Vol 12 (1) ◽  
pp. 58-78 ◽  
Author(s):  
Wiboon Kittilaksanawong
Keyword(s):  
Host Country ◽  
Foreign Firms ◽  
Financial Resources ◽  
Organizational Slack ◽  
Foreign Direct Investments ◽  
Firm Resources ◽  
Firm Level ◽  
Content Type ◽  
Entry Strategies ◽  
Marketing Resources

Purpose The purpose of this paper is to examine the effect of institutional distances (IDs) on the choices of host country and the entry strategies, taking into account various firm resources. Design/methodology/approach Institutions are quantified in terms of regulatory, normative, and cognitive aspects. Firm resources include technological and marketing resources, organizational slack, and internally generated and externally raised financial resources. The research context is foreign direct investments of Taiwanese listed firms in the electronics and computer industry from the year 2000 to 2007, which include 732 companies investing in 3,691 projects in 41 countries. Findings The tacitness of technological resources inhibits their transfer to distant countries. Marketing resources are more transferable to distant countries in terms of explicit regulative institutions. Organizational slack may weaken motives of firms in entering distant countries. Internally generated financial resources encourage risky investments in distant countries in terms of regulative institutions. Externally raised financial resources, due to their providers, restrict firms to finance risky projects in distant countries. High-control entry strategies are preferred to minimize appropriation risks regardless of funding sources. Involving local partners through a shared ownership provides institutional knowledge for foreign firms to mobilize local legitimacy in host countries. Firm resources directly and indirectly determine entry strategies through perceived IDs. Originality/value This study bridges the effect of firm-level resources and country-level institutions on the choices of host country and the entry strategies. It is among the first to quantify institutions in terms of their regulatory, normative, and cognitive aspects.

scholarly journals On MNC-Host Government Relations: How Finnish Firms Respond to National and Regional Policies in ASEAN

2017 ◽  
Vol 34 (2) ◽  
pp. 54-76 ◽  
Author(s):  
Erja Kettunen
Keyword(s):  
Host Country ◽  
Financial Crises ◽  
International Political Economy ◽  
Trade Agreement ◽  
Southeast Asian ◽  
Foreign Firms ◽  
Foreign Direct Investments ◽  
Regional Production ◽  
Host Government ◽  
The Impact

Combining literature from international political economy, international business, and institutional approaches to business studies, this article discusses foreign firms' relationship with the public sector in Southeast Asia. It focuses on the perceptions of the firms on host country policies toward foreign direct investments (FDI) and the impact of global financial crises and regional economic integration on the firms' strategies. The multinational company (MNC)-host government relationship is seen as a cooperative and continual bargaining within a specific institutional framework. Based on interviews with managers of subsidiaries originating from Finland, it is found that the regulatory environment of Association of Southeast Asian Nations (ASEAN) countries varies from easy to difficult with regard to policies, bureaucracy and protectionism. These pose institutional constraints for the firms, with additional economic constraints caused by global financial crises. Contrary to expectations, the ASEAN free trade agreement does not figure in the firms' investment strategies. This is explained by three findings: most of the firms serve the domestic host country market; the firms operate global rather than ASEAN-wide regional production chains; the firms represent industries that are not typical in Southeast Asian regional production networks.

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